LONDON—U.K. Deputy Prime Minister
Nick Clegg
sought to distance his party from its governing coalition partners on Sunday by criticizing the Conservative Party’s approach to Europe, while also taking aim at Labour’s handling of the budget deficit.

The Liberal Democrat leader called for an increase in taxes and said the hole in Britain’s public finances couldn’t be dealt with by either spending reductions or tax increases alone.

Mr. Clegg is seeking to rally support for his party at its annual conference in Glasgow ahead of May’s general election, positioning his centrist pro-European Liberal Democrats as the coalition partner of choice in what is expected to be a closely fought election.

In an interview with the British Broadcasting Corp. on Sunday, he said Labour failed to acknowledge the deficit, while Prime Minister
David Cameron’s
Conservatives were giving the wealthiest in the U.K. a free pass.

“Those choices, either sticking your head in the sand or beating up on the poor are not the choices the British people want. They want balance…and that is what we are offering,” Mr. Clegg said.

At a rally on Saturday, he attacked his coalition partners by saying a Conservative government would hurt the young and working poor, while Labour would bring about a return to increasing debt and recession.

“We can’t allow Labour to throw away our recovery. And we can’t allow the Conservatives to put the interests of a few above the needs of the many,” said Mr. Clegg. “The only party that can build a stronger economy and a fairer society, so that everyone can have the opportunity to get on in life, is the Liberal Democrats.”

Despite having little chance of a victory, the Lib Dems could play a major role in May’s election if neither the Conservatives nor Labour manage the unlikely feat of securing a majority. Mr. Clegg is seeking to sell the Lib Dems as the coalition partner that could soften the Conservatives’ approach to austerity, but also give economic credibility to Labour, which presided over a ballooning deficit when last in power.

He also hit out at the Conservatives’ approach to Europe, with Mr. Cameron having promised a referendum by 2017 on whether the U.K. should exit the EU if his party is elected in May. Mr. Clegg said such a move could result in a “Britain, diminished and divided after a botched attempt to renegotiate our relationship with Europe and a vote to withdraw from the European Union.”

In his conference speech on Wednesday, Mr. Cameron said going into coalition with the Lib Dems was what he had to do rather than what he wanted, while Conservative Home Secretary
Theresa May
said the Lib Dems had put innocent people in danger because they didn’t want to give security agencies more surveillance powers.
Boris Johnson,
the Conservative Mayor of London, got in on the act too on Tuesday, saying Mr. Clegg should be allowed to get on with whatever it is he does, “which I haven’t quite discovered.”

Opinion polls indicate the Lib Dems’ support has fallen to less than a third of the 23% share of the vote it won at the last general election in 2010, and the party has been displaced as the U.K.’s third most popular by the anti-Europe U.K. Independence Party.

Mr. Clegg enjoyed a surge of support in the run-up to the 2010 election, drawing votes from the left and the right. But that has drained away as the Lib Dems have backed the Conservatives’ cuts to reduce the budget deficit and reversed key pledges, notably a promise not to back the introduction of fees for university tuition. Polls put Mr. Clegg as the least trusted of the leaders of the main political parties.

At the rally, Mr. Clegg acknowledged the challenges his party faces: “Make no mistake, conference, this is the fight of our lives.”

Labour Deputy Leader
Harriet Harman
said in a statement Sunday that the Conservatives couldn’t have had the same impact without support from the Lib Dems. “Working people have been left worse off by a government which stands up for a privileged few, and the Lib Dems have been complicit every step of the way,” she said.

The Lib Dems could retain some 30 seats at the general election even at their current levels of support, putting them in a position to play kingmaker again, said
Tom Mludzinski,
head of political polling at survey firm ComRes. But, he added, the party’s leadership has a tough task ahead in terms of winning back the trust of the electorate and claiming credit for its achievements in government, such as the U.K.’s economic recovery.

“They will have to big up their record in government and prove that they can be trusted,” Mr. Mludzinski said.

Among the Lib Dems’ biggest contribution to economic policy has been the raising of the level at which workers begin to pay income tax, which is set to hit £10,500 ($16,800) in April—a measure that the government says has benefited millions of voters. Elsewhere, the party has championed the so-called state pension “triple lock,” by which state pensions rise in line with whichever is greater out of earnings growth, inflation or 2.5%. It also has a strong record on education and has helped push through increases in funding for state schools to spend on disadvantaged children and free school meals.

But it has also seen the other major parties move in on their policy-offering territory. The Conservatives recently promised to raise the level at which workers begin to pay income tax to £12,500 during the course of the next five-year parliament—a Lib Dem pledge. Meanwhile, Labour has said it would introduce a levy on homes that are worth more than £2 million—a policy long-advocated by the Lib Dems.